Asian investors are seeking bargains after EU referendum
Joanne Jia, Head of Asia, talks about the impact of Brexit on Asian investors looking to put their money into the UK.
It has been more than a month since the EU referendum, and although many overseas investors intend to wait and see until better understanding of Britain’s future after Brexit and further renegotiations are settled, many investors view this as a rare opportunity and seek any bargain given by a weakened British Pound.
Among these investors, Chinese and Hong Kong investors are relatively active and have completed many transactions, both property and corporate, across the UK and the expected inbound tourism boom due to sharp dropped currency has encouraged players into the UK hotel market. Hong Kong-based Magnificent Hotel Investments closed Travelodge Royal Scot Hotel deal for £70.3m and Y.T. Realty, also based in Hong Kong, bought the 1 Harrow Place Travelodge for £42.3m, reflecting their confidence about the tourism market in London.
Outside of the capital, Sheffield City Council announced Chengdu-based Sichuan Guodong Construction Group will initially invest £220m for five property projects in the city centre, including residential, office and hotel aspects, over the next three years and more than £1bn to be invested over the next 60 years, forming the largest Chinese investment outside of London.
Asian investors are clearly targetting British enterprises and their expertise. The largest acquisition made by Chinese investors is the Odeon & UCI Cinemas Group, one of largest European cinema groups, which was sold to US-based AMC Entertainment. AMC, which is majority-owned by the Chinese billionaire Wang Jianlin’s Dalian Wanda Group, made the purchase for £920m, making Wanda the largest global cinema exhibition group.
In addition, high-technology is also a key objective for Asia capitals. Tokyo-base Softbank, one of the world's biggest technology companies, has acquired Cambridge-based ARM Holdings, a leading chip designer accounting for over 95% of smartphone chips, for £24bn.
Other notable deals include semi-trailer maker, Retlan being sold to China International Marine Containers (CIMC) for £92m and game designer, Splash Damage, being acquired by Chinese Leyou Group for USD$150m. Huawei also announced it will continue with £1.3bn UK investment despite Brexit.
The British national sport, football, is also on their target list, including Fosun acquiring Wolverhampton football club for £45m.
Given the weakened currency rate and its reputation, it is clear that Asian investors continue to see UK as an attractive destination for the foreseeable future.
